Stocks Falter As Fed Signals Need For Higher-For-Longer Rates; Uber Crashes, Energy Sector Loses Ground: What's Driving Wednesday's Market?

Wednesday witnessed a tempering of the bullish sentiment that had buoyed Wall Street in recent sessions, with major indices showing slight declines around midday trading in New York.

Hawkish remarks from Minneapolis Fed President Neel Kashkari and Boston Fed President Susan Collins sparked concerns among investors about the potential delay in rate cuts, as the likelihood of enduring higher interest rates gained traction.

Kashkari asserted that the Fed would likely need to maintain borrowing costs at current levels for an extended period, potentially throughout the year, and did not rule out rate hikes if inflation remained stubbornly high at 3%.

Collins echoed similar sentiments, suggesting that a slowdown in economic growth would be necessary to bring inflation closer to the Fed’s 2% target, cautioning against premature rate cuts.

The S&P 500, as tracked by the SPDR S&P 500 ETF Trust SPY, edged down by 0.2%, striving for a fifth consecutive day of gains, which would mark the longest winning streak since late January.

The Nasdaq 100 also slipped by 0.2%, while blue-chip stocks in the Dow Jones Industrial Average marginally managed to avoid losses. However, small-cap stocks were the laggards of the day, with the Russell 2000 Index declining by 0.9%.

In the commodities market, the Energy Information Administration’s report of a decline in crude oil inventories last week led to a modest 0.6% increase in West Texas Intermediate prices. Gold prices remained steady, while silver experienced a modest uptick of 0.6%.

Bitcoin BTC/USD traded flat at $62,300.

Wednesday’s Performance Of Major US Indices, ETFs

Wednesday’s Stock Movers

• Uber Technologies Inc. UBER fell over 9% after the company missed earnings expectation, ad reported a loss in Q1.
• Other stocks reacting to earnings were Shopify Inc. SHOP, down 19%, Tripadvisor.com TRIP, down 29%, Kyndril Holdings KD up 23%, Emerson Electric Company EMR up 3.5%, Vista Corp. VST, Broadbidge Financial Solutiom BR down 6%, TPG Inc. TPG down 3% Arista Networks, Inc. ANET, up 6%, Occidental Petroleum Corporation OXY, up 3% Reddit, Inc. RDT up 2.3%, Rivian Automotive, Inc. RIVN down over 11%, Twilio Inc. TWLO down over 6%.
• Those reporting after the close include Airbnb, Inc. ABNB, AppLovin Corporation APP, Beyond Meat, Inc. BYND, Bumble Inc. BMBL, Cheesecake Factory Incorporated CAKE, Exact Sciences Corporation EXAS, HubSpot, Inc. HUBS, News Corporation NWSA, Robinhood Markets, Inc. HOOD, Sunrun Inc. RUN, The Trade Desk, Inc. TTD and SolarEdge Technologies, Inc. SEDG.

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Image generated using artificial intelligence via Midjourney.